COMMENT Customer needs - who cares?
22.04.05, 12.14 GMT, London
This week the RIAA announced another step in its war against MP3 music downloaders by the successful prosecution of even more people and its pursuance of copyright justice. The numbers prosecuted now measure in the hundreds, which probably leaves a mere 500 million or so to go!
If only the old music industry had watched the market, listened to the customers and adapted their business model, perhaps this endless and futile debacle could have been avoided. But it seems that companies wed to a business model are all too often unable to change and eventually die. It's certainly true of the canal industry with the arrival of the steam train and the internal combustion engine promoting the demise of the railways.
Today many industries are under threat, including fixed line and mobile network operators. Customers are calling the shots and freedom is the war cry! Connectivity has become a commodity. Wi-Fi and other technologies (WiMax) are quickly moving in to disrupt the market.
Irony 1: As I was writing this blog, a news item appeared on my screen detailing the CEO of a US mobile operator sounding off about the ridiculous idea that people will use their mobile phone, in their home, with VoIP on their own Wi-Fi link. Doh! Yep, it seems about as absurd as coal wanting to travel at 60mph instead of 3mph when it transited from barge to steam train. I think the customers have got news for this CEO – they're just going to do it.
Over the past eight weeks I've travelled back and forth to the US three times and at no time have I used my mobile phone for data connection. I only rarely used it for speech when I was travelling in my car. Wi-Fi connectivity has been free, and VoIP to the UK and across the US has been perfect.
Irony 2: This column is being typed in a London hotel where the cost of high-speed connection is £15 per night, but in the lobby there are three Wi-Fi suppliers providing free access.
If only mobile operators realised that there is a golden opportunity for them to change their business model and to increase their chances of survival. It's easy to understand how an industry with a history of over 100 years, like the canals, railways and indeed the fixed line telephone companies, might become so entrenched that they just don’t get IT. But hey, the mobile companies have only been around 20 years and you'd think that lack of maturity would see them more free-thinking and able to change. But it appears not.
So who’s going to be the next victim? It seems to me that Hollywood is limbering up to do an encore. They resisted VHS and DVD – and they are now devoting energy to stop movie downloading. I think the last monumental error of this scale involved King Canute.
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1. Russ Venlos
Just in case you did not know....
Railroads in America move more fright today then in any time in history.
Indeed they are turning away traffic because there is no room for more trains.
2. Mike Ralph
The theme that companies should give up on the fight to protect their copyright and intellectual property from theft via the web is often repeated by Peter Cochrane. What I have never seen from him is a proposal for an alternative commercial model that would provide the rewards needed to stimulate the creation of intellectual property. So come on, Peter, what's your idea?
3. Mark Hosey
Apparently King Canute did not make a monumental blunder. He is reputed to have gathered his sycophantic followers together to demonstrate that, contrary to their belief, he was not in fact omnipotent but just an ordinary man. After failing to hold back the tide he's supposed to have said "see, I told you I couldn't".(ok, so I paraphrase a little!)
A more fitting analogy would be the "king with no clothes" who, having been conned by a bogus tailor, paraded up and down the street in the altogether believing he had on magic clothes who all but a fool could see. Everyone, not wishing to appear a fool, oo'ed and aa'ed at the "lovely clothes" but was finally accused of streaking by a fool who knew nothing of the con. He was in fact the only person willing to point out the obvious.
I too am a fool Mr Cochrane and I believe the music and movie industry will have to find some other way of making their money. Either that or go bust. Personally I couldn't care less but for what it's worth, if they want a sure fire way out of the hole they're in they should give me a ring.
4. Knut Boehnert
The trains in Europe are getting back into consideration for mass freights too.
But governments blundered well and truely looking after public transport but ignoring freight.
And due to this more freight is transported over the road than over the rail because (for now) it is cheaper and requires less coordination than a combined rail/road system.
This business model too will come under a high pressure in about 10 years - by which rising oil prices will force trucks of the road with no apparent system (for now) to take over the necessary distribution of food (and other consumables) in Europe.
But that is the nice thing about capitalism: If there is a gap between demand and offer then there is bound to be someone who comes up (in the end) with a working business model that makes money.
At first this service will be expensive to use (due to near monopoly) but over time bandhoppers will join and competition will drive down prices.
5. anonymous
This copyright persual makes me laugh. I live in West London and every time I am in Hammersmith, Fulham, Kensington and anywhere else there are hoardes of people selling illegal DVD copies on the street in broad daylight. Do they ever get their collars felt by plod? No. Picking on peer-to-peer users for downloading probably fifty quids worth of MP3's and not even blinking when multi-million pound organised fraud is openly pedalled on London's streets is just a joke. Priorities are just not right in this scenario.
6. Tom Boles
I too, read that certain CEOs statements about customers using their cell phones and since I AM one of "his" customer, when I am up for renewal in two months, my money will do my talking for me! I have good service in my home (we do not have a landline) but messages that take 24 hours to be received, non-registering calls and customer service that can do little about real problems torques me off! His campany is almost as bad as the local cable TV and broadband ISP, renowned for horrible attitudes towards customers....
7. anonymous
I think Peter is spot on. Traditional purveyors of music lost out and Apple won big when it took a risk and trusted honest people to be willing to pay reasonable prices for good quality content. The film guys have dabbled in a few undersupported efforts (almost exclusively in the U.S.) and are now solidly losing that battle, while now the whole TV piracy situation is busting wide open as well. You can download something minutes after it's been broadcast!
Wake up and smell the Bit Torrent, guys! The geography-based rules of content distribution have become irrelevant in an Internet-driven world. Create a fair business model for people to get film & TV content via the internet, and honest people will pay. The technology exists to protect it from theft, so why not?
8. anonymous
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